Former Promoter of Abusive Trusts Pleads Guilty to Tax Evasion

Orem, Utah, Resident Was Scheduled to Begin Trial Next Week

WASHINGTON, June 30 /PRNewswire-USNewswire/ -- Roderick Prescott, a resident
of Orem, Utah, and a former principal of National Trust Services (NTS) in San
Jose, Calif., and later Selma, Ore., pleaded guilty today to tax evasion, the
Justice Department and Internal Revenue Service (IRS) announced. Prescott
admitted to evading at least $550,000 in personal income taxes for 1998 and
1999. Prescott was scheduled to begin trial on July 7, 2009, before Chief
U.S. District Judge Ann Aiken in Eugene, Ore.

According to the indictment, the plea agreement and the government's trial
brief, Prescott and his former business partner Leroy Fritts (now deceased)
earned significant income from the nationwide promotion and sale of abusive
trusts through NTS, which they founded in 1988. Prescott and Fritts deposited
approximately $3.5 million into various bank accounts through the sale of such
trusts. They also earned income from recruiting clients of NTS to invest in
Fountainhead Global Trust (FGT), a purported offshore investment that promised
returns as high as 50 percent per year.

According to the government's trial brief, FGT was a Ponzi scheme which
collected approximately $20 million in investors' funds from 1995 through
1999. FGT transferred some of the money to an offshore account in the Cayman
Islands at the Bank of Bermuda, ostensibly to be invested in high-interest
debt through a Florida entity called "Cash 4 Titles." Prescott and Fritts
then funneled part of the money in the account back to themselves. They also
took large sums of investors' funds without ever sending the money offshore.
The government asserts that instead, they spent the funds often by direct
payments from FGT bank accounts on luxury goods and real estate. Eventually
the scheme broke down and the vast majority of investors lost their full
investments.

According to the government's trial brief, despite making significant income
from NTS and FGT, neither Prescott nor Fritts filed any individual federal
income tax returns for 1998 or 1999. Prescott last filed a tax return in
1991. Prescott and Fritts used FGT money to purchase, among other items, a
nearly $3 million ranch near Grants Pass, Ore., on which they began
construction of two custom-built luxury log homes. The construction budget
was approximately a combined $2 million, and they spent over $465,000 before
halting construction in 1999. Prescott and Fritts also purchased solar panels
for the ranch for over $328,000, frozen food in anticipation of a year 2000
apocalypse for over $1.1 million and numerous vehicles and other personal
items.

According to the government's trial brief, Prescott and Fritts used an array
of purported trusts and related bank accounts, including numerous offshore
bank accounts at the Bank of Bermuda in the Cayman Islands, to conceal their
income from the IRS. Prescott and Fritts also used false or fictitious
taxpayer identification numbers and offshore credit cards in fake names issued
to them by the Bank of Bermuda in the Cayman Islands.

Judge Aiken scheduled sentencing for Sept. 9, 2009. Prescott faces a maximum
sentence of five years in prison and a maximum fine of $250,000.

Acting Assistant Attorney General John A. DiCicco commended the IRS-Criminal
Investigation special agents who investigated the case, as well as Tax
Division trial attorneys Jay Nanavati and Timothy Stockwell who prosecuted the
case.

Additional information about tax fraud schemes to watch out for may be found
on the IRS Criminal Investigation Web site http://www.ustreas.gov/irs/ci.
Additional information about the Justice Department's Tax Division and its
enforcement efforts may be found at http://www.usdoj.gov/tax.

SOURCE U.S. Department of Justice

U.S. Department of Justice, +1-202-514-2007, TDD: +1-202-514-1888